First of all I will admit I have joined this forum specifically to get an answer to my question, but now that I have had a little look around I realise that it could be quite useful - so no doubt I will be a regular user.
I have only recently started Forex trading, previously only having been generally interested, but recently, with a little more disposable income, I decided to take the plunge and try and see if I could actually make any money. So that I did not make an absolute pigs ear of it I only invested a small amount so that I could begin to understand the volumes and ratios that I would need to juggle and to get an idea of what my potential returns could be relative to my orders.
I had been happily trading for just a couple of weeks when recently I had to take a big step back. I had assumed that a Stop Loss order was unequivocal - my safeguard if you like. However, it appears not;
Using my Forex company’s web site and trading EUR/USD, I opened a position on 1/4/2016 at 11:04. At 11:08 I set a Stop Loss limit at 1.13956 and gradually lifted this limit up, until 12:19 when I set it at 1.14140, knowing that at this stage I was “in the money”.
At 12:30 the system auto-executed the Stop Loss but at the lower rate of 1.14067, resulting in a loss on the position.
After querying this with my broker he explained that as the period in question was during a major market announcement (it was), and the market moved very rapidly down (it did) the Stop Loss process could not “catch” the drop and gave the next available rate.
As a total novice in the Forex market my only question is “Is the wool being pulled over my eyes or not ?”